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The Cost Of Litigation To Recover Insurance Benefits

Insurance laws in most states prohibit insurance carriers from forcing policyholders to sue for indemnity, however, that never stopped a carrier from using the threat of claim denial to pressure policyholders into settling for less under the threat that they may be forced to hire an attorney to file suit against a carrier using bad faith acts and practices to suppress or altogether deny one or all of the elements of a legitimate insurance claim.

Policyholders seeking our help after filing and negotiating their own claims that resulted in denial often ask our opinion about retaining an attorney to sue their carrier. What they don’t realize is that carriers are extremely well funded and can far outlast most of the policyholder’s litigation expenses using multiple frivolous motions that they know will be denied, but cost thousands of policyholders unrecoverable attorney fees to successfully argue.

Litigation takes years and the benefactors are usually the attorneys especially in states like New York that do not allow punitive damages as a private right of action regardless of how egregious the carrier’s conduct was.  Consequential damages in New York are rarely considered by the courts unless they meet the specificity of two appellate cases. The two cases were Bi-Economy Market, Inc. v. Harleysville Insurance Company of New York and Panasia Estates Inc. v. Hudson Insurance Company.

If you are forced to litigate, it’s best to contact one or more public adjusters prior to calling anyone else in the insurance industry, after which you can make an informed decision about what your next move should be. An NYS-DFS complaint may be all that you need.